Senco Gold rallies 20% as Q4 biz update paints healthy demand outlook

Shares of Senco Gold rallied 20 per cent to Rs 960 on the BSE in Monday's intra-day trade hitting its 52 week high and breaching the previous record of Rs 897 touched on February 27, 2024. The rise in stock price came amid heavy volumes after the company reported 39 per cent year-on-year (YoY) growth in revenue for the March quarter(Q4FY24).

The management has an optimistic outlook for the financial year 2024-25 (FY25), starting from Q1FY25 which has local new years (like Poila Baisakh/ Ugadi/ Baisakhi) and Akshay Tritiya starting from 10th May alongwith upcoming marriage season acting as tailwind for growth.

 

At 12:15 PM; Senco Gold was trading 17 per cent higher at Rs 938.80, as compared to 0.60 per cent decline in the S&P BSE Sensex. The average trading volumes at the counter jumped over five-fold. A combined 2.37 million equity shares changed hands on the NSE and BSE.

Despite rising gold prices, on a YoY basis the company said it achieved 13 per cent volume growth in Gold and 19 per cent volume growth in diamond in FY24. Same Store Sales Growth (SSSG) during FY24 was 19 per cent out of retail sales growth; and was 23 per cent out of total 30 per cent retail sales growth during Q4 giving a major impetus for growth contributing about, Senco Gold said in FY24 and Q4 business update.

Gold price rise has impacted unorganised jewellers, but as far as organised listed jewellers are concerned, they have grown impressively. This price rise has led to a squeeze in the working capital availability due to higher margins for Gold Hedging and Gold Metal Loan (GML), the company said.

Given the run-up in gold prices, Senco Gold's management believes that demand will remain structurally intact, but some amount of deferment is possible. The overall demand has remained strong and Senco Gold has been gaining market share from unorganized players over the last few years, which is expected to continue in the medium term, analysts at InCred Equities said in a recent management meet update.

Senco offers an extensive range of jewellery, including gold, diamond, silver, platinum, as well as precious and semiprecious stones. Senco's brand portfolio includes “Everlite” focused on lightweight jewellery; “Gossip” the silver and costume jewellery brand; and “Aham” catering to men. The company also has Vivaha and Rajwada collections, which are a premium wedding jewellery range. The company has recently launched “Sennes” Brand for leather bags and accessories as well.